Question

In: Finance

how do brokerage make their money in investment banking fees and mutual fees

how do brokerage make their money in investment banking fees and mutual fees

Solutions

Expert Solution

Investment banks charge an investment banking fee for the services that
the investment bank offers.
The main service that an investment bank offers is what is known as I.P.O (Initial
public offering).
When a company reaches a point where it needs to raise money to expand, the company
employs an investment bank.
An investment bank can issue stocks or corporate bonds as part of the I.P.O.
An I.P.O is when an investment banks sells newly issued shares of a company in the financial
market. In the process, the investment bank charges an investment banking fees.
An investment bank offers another service called M&A (mergers and acquisitions).
In an M&A deal, a bank provides the service of offering advisory services to companies
looking to acquire other companies or merge with other companies.
An investment bank charges investment banking fees when it provides M&A advisory
services to clients.

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